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Coronavirus

Ovolo Hotels searches for answers

Author: Theodore Koumelis / Date: Fri, 02/21/2020 - 11:15
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The current economic downturn in Hong Kong due to social unrest and now the Coronavirus has been felt across all corners of the city including the retail, aviation and financial sectors, with the tourism industry being the hardest hit.

Tourism forms one of the major pillars of the economy, contributing over 4% to GDP and accounting for 7% of total employment, so Ovolo Group’s Hong Kong COO, Tim Alpe, has called on the Hong Kong Government for assistance for the local tourism industry due to the recent omission of the industry from the HKD$28 billion relief package.


"I write to you in a time of unprecedented challenges being faced by the hospitality industry in Hong Kong. Tourism forms one of the major pillars of the economy, contributing over 4% to GDP and accounting for 7% of total employment, so why have the cities hotels been forsaken in the recent relief measures?

The ongoing impact of the social unrest left hoteliers battling macro-economic factors outside of their control since June 2019, that has now been compounded with the Novel Coronavirus COVID-19 outbreak effectively putting tourism on hold for the 84,000 rooms that call Hong Kong home. Daily visitors have fallen to a mere 3,000, down 97% from the 90,000 overnight visitors seen daily in February last year. Retrospectively the hotel association has occupancy levels for members recorded at 92.5%, at the present moment if you are north of 20%, you’re industry leading. The situation is beyond fighting for market share, it’s now about survival.

Late 2017 you released the development blueprint for the tourism industry, it aimed to develop Hong Kong into a world-class destination and ensure the “balanced, healthy and sustainable development of the industry”. One of the development strategies was to upgrade the service quality of the tourism industry where the HKTB continues to promote a Quality Tourism Services (QTS) Scheme, now although less than 1% of the cities inventory valued this accreditation at last report, it showed commitment to ensuring Hong Kong was a sought after destination for its quality offerings. Furthermore, the 2019-2020 land sale program outlines four additional sites at Kai Tak to add an additional 2,900 rooms. The significance of tourism to Hong Kong is certainly there in the thought planning, so begs me to question why it hasn’t been integral to the relief measures proposed? 

We are seeing hotels reducing operations and even closing their doors, restaurants failing, redundancies across the board and unpaid leave for employees. The costs of maintaining operations now out way the basic commitments to banks and landlords for the premises in which they reside, we’ve implored our suppliers and business partners to support when and where they can, yet our pleas fall on deaf ears at a legislative level.

Tourism is not only a major contributor to the Hong Kong economy but culturally a backbone of our city’s global reputation as ‘Asia’s World City’, and for an industry which is at the very ethos, the core of this message, we have been left to fend for ourselves. 
We are doing our part supporting our employees and continuing to invest in trade and media activities so when these stormy days pass, Hong Kong’s diverse array of accommodation providers will still be on the map. 

Sustainability was a priority in your eyes, please heed the call from a sector as we all struggle to endure, before it’s too late."
 

ABOUT THE AUTHOR

Theodore Koumelis

Co-Founder & Managing Director

Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.